Solution-What should the final equivalent value payment be

What should the final equivalent value payment be

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Reference no: EM133042011

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Q1. Alex is purchasing a membership in a fitness center. He can pay either $280 now or pay $100 now, $100 in twelve months, and $100 in fifteen months. Which option is better if money is worth 8% compounded monthly?

Q2. Find the proceeds of the following promissory note. A 15-year promissory note dated April 1, 2001 with a face value of $1500 bearing interest at 7% compounded semi-annually, discounted eight years later when money was worth 8% compounded quarterly.

Q3. An obligation of $18000 due one year ago is to be settled by four equal payments due at the beginning of each year, with the first payment now. What is the size of the equal payments if interest is 9% compounded semi annually?

Q4. Debt payments of $3000 today and $4000 due 24 months ago are NOT PAID. Instead you will make a payment of $3000 in 12 months and a final payment in 18 months. If the interest rate is 6% p.a. compounded quarterly, what should the final equivalent value payment be? Assume focal date is in 18 months.

Reference no: EM133042011

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What should the final equivalent value payment be

Reference no: EM133042011

Reference no: EM133042011

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